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HMRC internal manual

Double Taxation Relief Manual

From
HM Revenue & Customs
Updated
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Moldova: Interest

Interest arising in Moldova and paid to a resident of the United Kingdom who is the beneficial owner of the interest is taxable in Moldova at a rate not exceeding 5 per cent (Article 11(2)).

Interest arising in Moldova and paid to a United Kingdom resident is, however, exempt from Moldovan tax if the beneficial owner is:

  • the Government of the United Kingdom, or a political subdivision, local authority or statutory body of the Government or is the Bank of England (Article 11(3)(a)); or
  • a financial institution (Article 11(3)(d)).

Interest arising in Moldova and paid to a United Kingdom resident is also exempt from Moldovan tax if the interest is:

  • paid by the Government of Moldova or by an administrative-territorial unit, a political subdivision, a local authority or a statutory body of Moldova (Article 11(3)(b)); or
  • paid in respect of a loan, debt-claim or credit that is owed to, or made, provided, guaranteed or insured by the Government of the United Kingdom, or a political subdivision, local authority or export financing agency of the Government (Article 11(3)(c)); or
  • paid with respect to indebtedness arising as a consequence of the sale on credit of any industrial, commercial or scientific equipment (Article 11(3)(e));.

Where, however, the interest is effectively connected with a permanent establishment which the United Kingdom resident recipient has in Moldova, the provisions of the Business Profits Article (Article 7) will apply.